On February 2, 2024, Exxon Mobil Corp (XOM, Financial) released its 8-K filing, detailing the financial results for the fourth quarter and full year of 2023. The integrated oil and gas giant, known for its exploration, production, and refining capabilities, faced a challenging year with earnings falling to $36.0 billion from $55.7 billion in the previous year. The company's performance was impacted by asset impairments, particularly a $2.0 billion impairment due to regulatory obstacles in California. Despite these challenges, Exxon Mobil Corp (XOM) demonstrated resilience with a strong cash flow and continued shareholder distributions.
Operational Highlights and Financial Performance
Exxon Mobil Corp (XOM, Financial) reported a decrease in fourth-quarter earnings to $7.6 billion, down from $9.1 billion in the third quarter and $12.75 billion in the same quarter of the previous year. The earnings per share (EPS) for the fourth quarter stood at $1.91, a decline from the previous quarter's $2.25 and the previous year's $3.09. The full-year EPS was reported at $8.89, compared to $13.26 in the previous year. The company's capital and exploration expenditures for the full year amounted to $26.3 billion, reflecting increased investments in strategic assets.
Despite the earnings decline, Exxon Mobil Corp (XOM, Financial) generated a robust cash flow from operations of $55.4 billion for the year and achieved a free cash flow of $36.1 billion. The company's commitment to shareholder returns was evident with $32.4 billion distributed in 2023, including $14.9 billion in dividends and $17.4 billion in share repurchases. The debt-to-capital ratio stood at 16%, with a net-debt-to-capital ratio of 5%, indicating a strong balance sheet.
Strategic Moves and Future Outlook
Exxon Mobil Corp (XOM, Financial) continued to high-grade its portfolio through strategic divestments and acquisitions, including a significant move to merge with Pioneer Natural Resources, which is expected to close in the second quarter of 2024. The company also launched the new MobilTM Lithium business, targeting the supply of lithium for electric vehicles (EVs), with plans to produce enough lithium to supply approximately one million EVs per year by 2030.
Advancing its climate solutions, Exxon Mobil Corp (XOM, Financial) made progress toward net-zero greenhouse gas (GHG) emissions in the Permian Basin, with plans to achieve net-zero emissions by 2030. The acquisition of Denbury, Inc. further strengthened the company's carbon capture and storage capabilities.
In the Upstream segment, fourth-quarter earnings were $4.1 billion, a decrease from the previous quarter, primarily due to asset impairments. However, excluding identified items, earnings increased slightly due to higher volumes and improved mix from assets in Guyana and the Permian. The company's production for the quarter was 3.8 million oil-equivalent barrels per day, an increase from the previous quarter.
Exxon Mobil Corp (XOM, Financial) faced headwinds in the form of lower industry refining margins and natural gas prices, which impacted the Energy Products and Chemical Products segments. Nonetheless, the company's Specialty Products segment continued to deliver strong earnings, highlighting the diversity and resilience of its business model.
As Exxon Mobil Corp (XOM, Financial) navigates through regulatory and market challenges, its strategic investments and focus on operational efficiency position it to continue delivering value to shareholders. The company's robust cash flow and disciplined capital management underscore its financial strength and commitment to long-term growth.
For more detailed information on Exxon Mobil Corp (XOM, Financial)'s financial results, investors are encouraged to review the full 8-K filing.
Explore the complete 8-K earnings release (here) from Exxon Mobil Corp for further details.
